The saving savings decree (or saving banks) is law. On Thursday, the Chamber definitively approved the provision for the precautionary recapitalization of credit institutions in crisis. The resources made available amount to 20 billion euros for 2017.
1) MONTE DEI PASCHI
The main beneficiary will be Monte dei Paschi, which, based on the capital requirement calculated by the ECB, needs 8,8 billion euros. The capital increase on the market has failed and the forced conversion of subordinated bonds into shares (the so-called "burden sharing") ensures 4,3 billion: the Treasury will put the other 4,5 billion on the plate, plus another two billion to compensate bond holders.
2) POPULAR OF VICENZA AND VENETO BANCA
But Montepaschi won't be the only bank to need help from the state. The former CEO of Mps, Fabrizio Viola, now managing director of Popolare di Vicenza and chairman of the strategic committee of Veneto Banca, confirmed that most likely the public hand will also have to intervene in support of the two Venetian institutions in view of the merger.
3) STATE GUARANTEES
The decree also provides for the possibility of granting a State guarantee on the liabilities of banks with urgent need for liquidity (provided they have their registered office in Italy and positive equity) or in favor of banks in resolution (such as Banca Etruria, CariFerrara, Banca Marche, CariChieti) or a bridge institution (the good banks born from the resolution). The State guarantee is onerous, unconditional, irrevocable and covers both principal and interest. The bank is required to present a restructuring plan to confirm its long-term viability and ability to raise funds on its own feet.
4) CAP ON THE SALARY OF MANAGERS
Among the innovations introduced in Parliament comes a ceiling on the salary of members of the board of directors and managers in the event that the bank benefits from public aid. There is also the possibility of “revocation or replacement of executive directors and the general manager”. However, the two conditions will not be mandatory, but only a choice by the MEF.
5) BANKS IN RESOLUTION: MORE TIME TO ASK FOR REFUNDS
Green light also to the reopening until 31 May of the possibility for savers of the 4 banks placed under resolution at the end of 2015 (Banca Etruria, Banca Marche, CariChieti and CariFe) to request a lump-sum refund.
6) TREASURY: REPORT EVERY 4 MONTHS ON THE RISKS RELATED TO LARGE DEBTORS
The Treasury will have to present a report to Parliament every four months on the "risk profiles" of large debtors (those who have bad debts for more than 1% of the bank's assets), but will not be required to reveal their names. In fact, the hypothesis of introducing real "black lists", as requested by the number one of the ABI, Antonio Patuelli, was skipped.
7) YES TO REFUNDS TO RELATIVES
The number of savers of the 4 banks is expanding, who will be able to request a lump-sum refund, a procedure which, it is specified, must be free of charge. The Senate Finance Committee, which yesterday evening gave the go-ahead for a reopening of the terms until May 31, approved two amendments to the saving-saving decree which extend access also to those who have received the bonds from their spouse or relatives within the second degree and which exclude the consideration paid for the bonds from the calculation of the movable assets, which has a ceiling of 100 thousand euros.
8) NO REFUND FOR SUBORDINATED BONDS FROM 2016
Anyone who bought the subordinated bonds of a bank subject to precautionary recapitalization after January 2016, XNUMX, the date the bail-in took effect, will not receive any compensation.
9) PRICE OF THE SHARES
New criteria are introduced to determine the share price to be attributed to shareholders and creditors of listed banks subject to precautionary recapitalization.
For unlisted banks, the value is calculated on the basis of the company's assets, its income prospects, the trend of the ratio between market value and book value of listed banks and taking into account the losses associated with any extraordinary transactions, including those from the sale of assets.
For listed banks, on the other hand, the value of the shares is determined on the basis of the performance of the quotations in the previous 30 market days and, in the case of suspension of the quotation for more than 15 days - as for Mps - the value of the share is the lower between the average reference price of the last 30 trading days and that determined on the basis of the assets and the criteria established for unlisted companies.
10) FINANCIAL EDUCATION AND TAX CREDITS
The BCCs will also be able to transform the deferred taxes deriving from adjustments to non-performing loans, implemented until the end of 2015, into tax credits. The terms for the payment of the fee that the banks are required to pay in order to be able to transform the Dta into tax credits have also been changed.
Finally, green light for the "national strategy for financial, insurance and social security education". The law provides that the government sends the Parliament the guidelines of the strategy within six months, which will be coordinated by a Committee that will remain in office for three years.
